briefing to the portfolio committee on tourism south african tourism 2013/14 annual report...

Briefing to the Portfolio Committee on Tourism

South African Tourism

2013/14 Annual Report PresentationDate: 24 October 2014

Slide no. 2

Contents

• Purpose

• Mission and Vision

• Corporate Governance

• 2013/14 Audited Performance Information

• Executive Summary

• Environmental Scan

• Global Tourism Performance

• Budget Allocation

• Key Initiatives

• People and Values

• Conclusion

Slide no. 3 © South African Tourism 2012

Purpose

The purpose of this presentation is to present before the Portfolio Committee SA Tourism’s 2013/14 Annual Report.

Slide no. 4

Contents

• Purpose








• Key Initiatives


• Conclusion

Vision and Mission

Vision

For South Africa (SA) to be the preferred tourist destination in the world, in order to maximise the economic potential of tourism for our country and its people.

MissionTo develop and implement a world-class tourism marketing strategy for SA. In pursuance of this, SA Tourism will:•Implement domestic, regional and international marketing strategies informed by research•Implement a business events strategy•Implement and maintain a recognisable, credible and globally benchmarked system of quality assurance•Facilitate strategic alignment of Provinces and industry in support of global marketing of tourism.•Facilitate the removal of identified obstacles to tourism growth. •Ensure the efficient utilisation of resources to deliver the tourism strategy

Slide no. 5

Page 3 of the Annual Report

Convince consumers that SA can be trusted to deliver memorable

experiences

Convince consumers that SA can be trusted to deliver memorable

experiences

Engage Stakeholders to deliver quality

visitor experience that re-affirm the

brand promise

Engage Stakeholders to deliver quality

visitor experience that re-affirm the

brand promise

Work the distribution channel to promote SA

Work the distribution channel to promote SA

Energise and empower the organisation to innovate and

achieve excellence

Energise and empower the organisation to innovate and

achieve excellence

Invest only in selected markets to deliver volume and

value

Invest only in selected markets to deliver volume and

value

SA Tourism refined its current objectives and strategies for the period until 2014/15 - in line with Government’s Performance Information Management Policy

Create a thriving tourism sector by making South Africa a tourism and business events destination of

choice

Create a thriving tourism sector by making South Africa a tourism and business events destination of

choice

Possible Tourism sector outcome which SA Tourism will need to deliver against

SA Tourism outcome

Strategies to deliver outcome

Make the SA brand a Global Player in portfolio markets, hubs and decision making centres which will grow tourism’s

trended revenue to the economy by 1.5% p.a. (excluding inflation)

Make the SA brand a Global Player in portfolio markets, hubs and decision making centres which will grow tourism’s

trended revenue to the economy by 1.5% p.a. (excluding inflation)

Slide no. 6


Slide no. 7

SA Tourism’s Mandate set out in the Tourism Act makes it clear that it needs to make choices that will benefit all South Africans

Sustainable GDP Growth

Sustainable GDP Growth

Sustainable job creation

Sustainable job creation

Redistribution and

transformation

Redistribution and

transformation

The mandate to SA Tourism is ...

… through six key

objectives

…by acting in a focused way to

Increase in tourist volume

Increase in tourist volume

Increase in tourist spendIncrease in

tourist spendIncrease length

of stayIncrease length

of stay

Improve geographic

spread

Improve geographic

spread

Improve seasonality

patterns

Improve seasonality

patterns

Promote transformation

Promote transformation


Slide no. 8

Contents

• Purpose








• Key Initiatives


• Conclusion


Corporate Governance• SA Tourism has received its 13th unqualified audit report in 2013/14.

• The Audited Financial Statements of SA Tourism were found to be fairly representative of the financial position of the organisation attested by the Auditor-General’s report.

• Audit findings raised by the External Auditors are addressed promptly and the number of audit queries raised has declined.

• Internal controls are reviewed and enhanced on an on-going basis.

• Risk and fraud management initiatives are implemented effectively.

• The improvement in internal controls can be attributed to an independent Internal Audit function and the oversight role of the Audit and Risk Committee of the Board.

Page 52 & 89 of the Annual Report

Slide no. 10

Contents

• Purpose








• Key Initiatives


• Conclusion

Slide no. 11

Strategic Objectives

Performance Indicator

Actual Achievement 2012/2013:

Planned Target:2013/2014

Actual Achievement:2013/2014

Deviation from Planned Target to Actual Achievement: 2013/2014

Comment on Deviations

Increase foreign visitor arrivals coming to South Africa

Number of foreign visitor arrivals

13 451 565 13 021 979 14 860 216 +14.12% Target achieved. South African Tourism capitalised on the strength of its partnerships, enhanced strategies and plans implemented in the markets in which we operate. This resulted in a 10.5% growth from 2012.

Increase domestic tourism in South Africa

Number of domestic travellers

12,5 million 15,0 million 12,0 million -20% Target not achieved. These adverse results were anticipated given the unattainable NTSS target which was set under different economic conditions. Revision of targets will be considered during the NTSS Review planned for 2015. The new domestic campaign, however, launched in August 2013 has started to show increased performance in terms of spend and number of trips in Quarter 4. This resulted in 80% achievement of the set target.

2013/14 Audited Performance Information

Page 57-58 of the Annual Report

Slide no. 12




Actual Achievement 2012/2013

Planned Target2013/2014

Actual Achievement2013/2014

Deviation from Planned target to Actual Achievement for 2013/2014


Increase tourism trended revenue contribution to the economy

Amount of trended revenue

R 12 800 (in 2012) NITSR 8 200 (TFDS excluding capital)R 105,4 billion TFDS revenue, excluding Capital expenditure

R 115.4 billion

R90 billion(Jan – Sep 2013)

-22% Given that annual figures are not available, audited performance information in this regard is reported only for the period January to September 2013. Upon reporting at year end, there were anomalies in the spend data that was produced by the service provider and as a result a review of the methodology was required to determine the reasons for the anomalies in the data produced.

Increase SA brand awareness

Brand awareness percentage

81% 79% 79% -Target achieved


Slide no. 13



Actual Achievement 2012/2013

Planned Target2013/2014

Actual Achievement2013/2014

Deviation from Planned target to Actual Achievement for 2013/2014


Provide quality assurance for tourism products

Number of graded establishments

6 022 6 789

5 587 -18% This shortfall was due to an increase in non-renewal of graded establishments, payment default and cancellations. This resulted in 82.3% achievement.

Increase business events

Number of delegates

52 587 56 000 94 893 +69% Target achieved. Due to lack of sufficient base line to set target, we have set our target based on ICCA’s average 600 delegates. However, in 2013 South Africa attracted more than the global average resulting in outstanding performance.



Slide no. 14

Contents

• Purpose








• Key Initiatives


• Conclusion


Environmental Scan

• Fragile economic recovery and expected economic recession

• Promising outbound tourism growth but short –haul travel

• Shrinking disposable income due to austerity measures - foreign markets

• Exchange currency weaknesses

• Unemployment dampening domestic tourism

Slide no. 16

Contents

• Purpose








• Key Initiatives


• Conclusion


Global Tourism Performance

• According to the UNWTO Report, international tourist arrivals (overnight visitors) grew by 5% in 2013, reaching a record 1 087 million arrivals worldwide, up from 1 035 million in 2012.

• The growth was mainly driven by developed markets where arrivals grew by 5.4% compared to 4% growth from emerging markets.

• This growth in international arrivals is slightly higher than the UNWTO forecast of 4% to 4.5% in 2014.

• Despite a global economy in ‘low gear’, demand for international tourism exceeded expectations, with an additional 52 million international tourists travelling internationally in 2013.

• Europe led the growth in absolute terms, welcoming 29 million more international tourists in 2013, and raising the total to 563 million. The growth of +5% was double the region’s average of +2.5% a year for the period 2005-2012.

• Asia and the Pacific recorded the fastest relative growth across all regions, with a 6% increase in international arrivals, or 14 million more than in 2012.


Global Tourism Performance

• South Africa’s tourist arrivals tracked closer to global growth trends at 4.7% at the end of 2013. While the world celebrated 1.087 billion tourist arrivals, Africa as a whole only welcomed 55.6 million arrivals on its shores, representing a mere 5% share of global tourism potential.

• Total foreign direct spend of all tourists declined from R74.2 billion in 2012 to R70.3 billion in 2013 i.e. a 5.3% decrease globally. In South Africa, the decrease was only 4% from R76.2 billion to R73.2 billion.

Slide no. 19

Contents

• Purpose








• Key Initiatives


• Conclusion


Revenue and Government Grant

• SA Tourism received R 866.9 million, in the form of Government grants from the National Department of Tourism. R20 million of which was recognised as income received in advance for Indaba rebranding.

• In addition to the above, SA Tourism also received R 131.3 million from TOMSA through its tourism levies. This amount was R44 million more than budgeted, contributing to the significant surplus recognised during the 2013/14 financial year.

• Sundry Income, accounted for in the Income Statement relates to funds received from exhibitors at trade shows such as Indaba and Meetings Africa, amounted to R 80.5 million.

• Foreign currency gains, which is the result of unrealised foreign exchange gains, increased from R 11.5 million in the previous year to R 27.99 million in the 2013/14 financial gain.


Revenue and Expenditure Name of the Objective 2013/14 2013/14

ENE Estimate Adjustment ApprovedAudited

Expenditure

in Rand Budget ( R’000)

Budget ( R’000) Budget ( R’000) Actual ( R’000)

Major Objectives

992 312 36 360 1 028 672 1 056 620

1

Increase annual foreign visitor arrivals to South Africa

336 952 5 000 341 952 347 609

2

Increase the number of Domestic Travellers

42 400 26 360 68 760 46 372

3

Increase tourism trended revenue contribution to the economy

336 9525 000

341 952347 609

4

Marketing South Africa to become the preferred Tourism Brand*

206 828 206 828 225 158

5

To provide quality assurance by having graded accommodation establishments

37 115 37 115 37 889

6

To increase the number of international Business Events delegates in South Africa

32 065 32 065 51 982

Total 992 312 36 360 1 028 672 1 056 620Slide no. 21

SA Tourism 2013/14 Budget Breakdown Per Country

Country Office Currency 2013/14 Budget1. USA

ZAR 65 323 340 2. UK

ZAR 49 726 166 3. Germany

ZAR 51 454 384

4. France ZAR 35 867 812

5. Netherlands ZAR 27 495 314

6. Italy ZAR 14 756 427

7. India ZAR 27 691 388

8. China ZAR 23 816 692

9. Japan ZAR 12 639 571

10. Australia ZAR 32 683 923

11. Angola ZAR 14 251 649

12. Nigeria ZAR 25 035 247

13. Brazil (Am) ZAR 21 377 815

14. Kenya ZAR 16 922 417

Slide no. 23

Contents

• Purpose








• Key Initiatives


• Conclusion


Key Initiatives: Global • Fully integrated marketing channels, considered globally implemented locally

• Global partners – o National Geographic – 458 million households; 172 Countries; 38

Languages (Dutch, English, Chinese, French, German, Italian, Spanish)

o CNN Global distribution – 484 million households, hotel rooms & airports worldwide

• #MeetSouthAfrica campaign rolled out across most Core Markets

• Numerous global awards won for excellent destination marketing execution

• Successful Joint Marketing Agreements (JMAs to facilitate fulfilment of objectives)

• The ‘heartfelt connections’ campaign has worked well to address the decline in awareness and positivity.



Key Initiatives: Global • Participation in international trade shows to improve market access for South

African tourism products.

• Use of integrated marketing approach – traditional and digital marketing



Key Initiatives: Africa

• Ring fenced budget of R50 million, R84 million and R84 million allocated over

3 years ending 2015/16 to increase arrivals and spend from Africa to contribute

to GDP and job creation.

• Dedicated Regional Director to manage ring-fenced budget.

• SA Tourism Nigeria office opened and resourced to service the West Africa hub.

• Participation in in-country Travel Expo in Nigeria.

• SA Tourism also participated for the first time at the Magical Kenya Expo. • In Angola, SA Tourism partnered with the Association of Travel Agencies and

Tour Operators from Angola; AAVOTA which contributed substantially to increased tourism growth.

• SA Tourism also partnered with Africa Next Top Model (ANTM) which was shot in

Cape Town and featured in DSTV lifestyle channels such as Africa Magic, Africa

Magic Entertainment, VUZU, Mzansi Magic and Africa Magic World.

• Spend remains buoyant in most African markets except for Africa Land

markets.

Page 28 & 29 of the Annual Report


Key Initiatives: Domestic• Domestic is a high priority market for SA Tourism with long term objective

aimed at encouraging South Africans to create the culture of travel in the domestic market.

• Integrated new “Sho’t Left” campaign was launched in August 2013 to also encourage South African travellers to take short breaks.

• Sho’t Left website a portal for better engagement with our trade partners.

• The Sho’t Left Deals Page boasts 700 strong product database of affordable tailored experience packages.

• Secured Provincial and industry buy-in and alignment in implementing the Domestic campaign and SA Specialist programme.

• Various JMAs signed with airlines, associations, travel agents, product and on-line agents to fulfil objectives.



Key Initiatives: South African National Convention Bureau (SANCB)

• SANCB focus its efforts on attracting events in economic sectors that have been identified by the government as priorities for future development. Hosting major events in these sectors can contribute significantly in accelerating macro-economic benefits for the country


SANCB Support Services

April 19, 2023 © South African Tourism 2014

SANCB SUPPORT SANCB SUPPORT SERVICES SERVICES

Bidding Support

•Bid Strategy •Bid Document •Lobbying•Bid promotion•Bid Presentations

Site Inspection Support

•Bidding Site Inspections•Convention Planning Site Inspections

Convention Planning Support

•Planning support•Venue and supplier recommendations•Final decision with client

Delegate Boosting Support

•Marketing support to promote the SA conference•Delegate attendance promotion

On Site Event

Services

•Support toward on site elements of the event

Market Priorities: Key Industries/Sectors – Provinces

April 19, 2023 © South African Tourism 2014

Mining and agriculture are major sectors across provinces; while manufacturing industries are mainly located in Eastern Cape, KwaZulu-Natal and Free State, the financial services sector is mainly concentrated in Gauteng

Western Cape Key Industries: Finance, printing and

publishing, real estate, ICT, oil and gas, retail, engineering, R&D4, clothing and textile, agriculture, ship building / ports, tourism and medical1

4

Gauteng Key Industries: Financial and

business services, logistics and communications, mining, agriculture (food processing and beverages), medical1, automotive2 manufacturing, R&D3 and telecommunications and technology

1

North West Key Industries: Mining (mainly

Platinum), tourism (game reserve, nature reserve, etc.) and agriculture

2

Northern Cape Key Industries: Mining (mainly

Diamonds, Iron-ore), tourism, game-farming, astronomy and agriculture

3

Limpopo Key Industries: Mining, tourism

(game reserves), agriculture and hunting industry / game farming

9

Mpumalanga Key Industries: Mining (Coal),

agriculture (citrus fruit production, agri-processing and sheep farming), tourism (eco-tourism), game farms and manufacturing

8

Free State Key Industries: Mining (Gold, Coal

and Diamond), agriculture, petrochemicals and manufacturing (high-tech industries)

7

KwaZulu-Natal Key Industries: Mining (Aluminum,

Steam Coal, Minerals), manufacturing (petro-chemicals, automotive), tourism, ports, leather industry and agriculture, real estate, medical1

6Eastern Cape

Key Industries: Automotive manufacturing, finance, real estate, agriculture (sheep farming and fishing), wholesale and retail trade, tourism, ports5 and hotels and restaurants

5

1

9

2

3

4

7

5

6

8

South Africa – Key Industries/Sectors by Provinces


Key Initiatives: Tourism Grading Council of South Africa (TGCSA)• Challenges

• Lack of credibility and adequate skills for grading assessors.

• Perceived lack of a credible grading process and grading criteria.

• Lack of an appealing Basket of Benefits that will increase value to graded establishments.

• SA Tourism through the TGCSA developed a Strategy aimed at achieving the following:

• Review of the TGCSA business model to increase the base of graded establishments as well as renewals

• Increasing value for graded establishments through the introduction of the Basket of Benefits.

• Review the assessor model from being independent to full time employees.

• Empower Assessors to be of greater value to the establishments.

• Offer support to Exempted Micro Enterprises (EMEs) in order to create a more inclusive base of graded establishments.



Key Initiatives: Tourism Grading Council of South Africa (TGCSA)

• Launched an additional grading category – the new Game Lodge category.

• Graded targeted establishments for universal accessibility as a special project funded by NDT.

• Enhanced partnerships with Online Review Platforms.

• Conducted Route to Market studies to gain deeper insights on consumers of South African Products.

• Planning and implementation of the Lilizela Awards.

Slide no. 33

Contents

• Purpose








• Key Initiatives


• Conclusion


People and Values• The achievements of SA Tourism are made possible through the collective

dedication and commitment of its staff (including overseas based personnel).

• Current staff complement of 206 is not expected to change in the 2014/15 financial year.

• Through SA Tourism’s recruitment and selection process, SA Tourism attracts qualified and experienced individuals.

• The adequacy of SA Tourism’s human capital is regularly reviewed and interventions such as succession planning and talent management are implemented.

• Continuous leadership assessments are conducted to ensure sustainability and business continuity.

• SA Tourism uses staff feedback mechanisms such as the Best Company to Work for Survey in order to ensure that the values of the organisation are upheld and staff remains motivated.


Slide no. 35

Contents

• Purpose








• Key Initiatives


• Conclusion


Conclusion: • The poor performance reported on number of domestic travellers for this

period were anticipated given the unattainable NTSS target which was set under different economic conditions.

• Although domestic targets were not achieved, the new domestic campaign launched in August 2013 started to show increased performance in spend and number of trips in Quarter 4 of 2013/14.

• The revamped TGCSA Strategy will address the challenges encountered during the year under review in relation to the number of graded establishments.

• Increasing cost of doing business abroad coupled with the shrinking budgets are compelling us to prioritise our markets, hence a shift from country focus to a hub approach in targeted markets.


Conclusion: • International offices update:

• Brazil recently opened. • Angola and Kenya offices will be opened in 2014/15 as part of the five

marketing offices in key African markets by 2020 including Nigeria that was launched in January 2014.

• The additional ring fenced budget of R100 million in 2015/16, R105 million in 2016/17 and R110.25 million in 2017/18 will be utilised to create the culture of travel as well as awareness in market segments where travel awareness is limited while growing the number of domestic travellers, trips and spend.

• In 2014/15, SA Tourism is intensifying its engagement with trade as part of the implementation of the domestic campaign together with industry.

• Continuously strengthen partnerships with strategic stakeholders, trade, media and government.

Thank You

Slide no. 38

briefing to the portfolio committee on tourism south african tourism 2013/14 annual report...

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